A new loan offering, a tranche of credit for regular borrower, WeBuyAnyHome.com, has landed on the Money&Co. website. The loan is rated A+ and will pay a fixed rate of 7% for a term of 36 months. It’s currently 16 per cent funded.
WeBuyAnyHome.com is a leading home-buying company and one of few, cash-funded, home-buying companies in the UK. The company is owned and managed by property professionals with over 300 years’ combined experience in the residential property sector.
WBAH is fully regulated by the Property Ombudsman, and a founding member of the National Association of Property Buyers. It is an award-winning business, ranking in the top 3 for YouGov’s “Top Brand Buzz 2019 Awards”.
We have received up-to-date financial information from the firm which illustrates the business’s strength. This information is provided below, along with a description on how the company has weathered the COVID-19 crisis and a summary of the business strategy.
If you decide to make a bid in the WeBuyAnyHome auction, we hope you will be successful. The loan is eligible for inclusion in an Innovative Finance ISA. To invest or get full details, log in or register here.
After a great start to 2020, with revenue significantly ahead of 2019 for the first 2 months of the year, the business was unexpectedly impacted by the COVID-19 crisis. In particular, the UK going into lockdown had a significant impact on property viewings and sales could not be concluded within the usual timeframe. As a result, revenues dropped by 46% in the second quarter of 2020. Whilst operating with much-reduced revenues, the business found that demand from house sellers remained high as they sought to liquidate assets to maximise cash. Given the uncertainty brought about by the long-term impact of COVID-19, the business was able to negotiate better terms for its house purchases than usual and this pushed up the gross margin from 16% to 20%, which helped to mitigate the fall in revenues.
As soon as the seriousness of the COVID-19 crisis became clear, the business moved quickly to take advantage of the support available from the UK government and placed the vast majority of its workforce on furlough. Once the lockdown was lifted, WBAH began to bring employees back from furlough and now has only two employees still furloughed. All other costs were immediately re-evaluated and the marketing spend, which was the main cost before the pandemic, is now running at 50% of the previous level. Once WBAH began operating with a reduced marketing spend, it became apparent that the business was still able to produce a strong level of leads. Over a number of years, the business has invested heavily in SEO to maximise growth. The business now attracts a good percentage of leads from organic ranking rather than pay-per-click. Purchasing in 2021 has started strongly. By the end of this month, the business anticipates returning to levels of stock last seen in April/May 2020. Whilst not quite as high as 2019 the trajectory is believed to be very positive.
Other Loan Offers
The other loan offer on site, from Mar-Key Group, has an A+ rating and an annual rate of interest of 7 per cent. The term of the loan is 24 months. The offer is currently 74 per cent filled.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.